5.4 (a) The market of a special type of Japanese cake is currently considered as a perfectly competitive industry. The market demand for this cake is Q, = 160 P and the market supply is 05 = P 10. where the quantities demanded and supplied are in million units, and P is in dollars. Calculate the equilibrium market price and quantity. Also, calculate the producer and consumer surpluses. (b) One big Japanese corporation has bought all the existing individual stores and formed a monopoly. The market demand remains the same and the marginal revenue of the monopoly is MR = 160 20. This monopoly uses the original rms as production base and the corresponding marginal cost for the monopoly is kept at MC = 10 + Q. What will be the selling price and quantity for this monopoly? Illustrate the prot-maximizing price and quantity in a diagram. (c) Calculate the consumer surplus and producer surplus for this monopoly. How are they compared to the case of perfect competition? Is there a deadweight loss? If so. how large is it? [Hint Use continuous method for this question. Draw the related diagrams if they help.]